We propose an observational study to examine a broad range of impacts produced by a state policy initiative that increased accessibility and availability of the evidence-based individual placement and support (IPS) model of supported-employment (SE) services for persons with severe mental illness (SMI) in Maryland. We will study the experience of Maryland's public mental health system (PMHS) in facilitating the diffusion of IPS-SE services in the state. Our research exploits inter-temporal and geographic variations in accessibility and availability of IPS-SE services 1) over time in the period 2002-2010 and 2) across geographic areas of Maryland. We also examine variations across providers in fidelity to the IPS-SE model. We propose to study the observed effectiveness of this state policy initiative in its actual operation and impact. This study will extend evaluative research on IPS-SE beyond the current focus on efficacy/effectiveness in small-scale RCT trials of a limited number of sites. We also propose to combine data from multiple public sector databases to expand the range of SE impacts studied, beyond the current research focus on employment outcomes, to include impacts on mental health status, and on mental health and somatic health treatment costs. The policy initiative that promoted the implementation and diffusion of IPS-SE services, undertaken by the Maryland Mental Hygiene Administration (MHA), began as a pilot project in 2002. MHA provided funding for training service providers and for monitoring providers for fidelity with the IPS-SE model. Beginning in 2006, financial incentives were given to providers for offering IPS-SE services, and for meeting fidelity benchmarks. This MHA initiative increased accessibility and availability of IPS-SE services for persons with SMI, with major increases, occurring in the period from 2004 to 2010, that also varied by geographic area. We plan to use data on individuals with SMI from several large, defined cohorts 1) of Maryland Medicaid recipients and 2) of other non-Medicaid-covered users of PMHS services, followed over the 2002-2010 period. Using these data, we will assess the impacts of the MHA policy initiative on (1) the take-up rate of IPS-SE services, (2) disparities by race and ethnicity in the rate of IPS-SE service use, (3) the mental health status of IPS-SE users relative to non-users, (4) costs of treatment for mental health specialty services and other health services for users vs. non-users of IPS-SE services, and (5) employment and earnings of users vs. non-users of IPS-SE services. We also will examine the impact of varying IPS-SE provider fidelity levels on these outcomes. A variety of regression analysis methods are proposed for estimating these policy impacts, including instrumental variables-generalized method of moments (IV-GMM) procedures, reduced-form regression models, models based on pooling of data on individuals over time, and analyses based on sequences of cross- sectional regressions. We propose IV-GMM methods to account for unobservable factors influencing selection into use of IPS-SE services, as well as tests for our assumption of endogeneity of the indicator of IPS-SE use.